Keystone XL Pipeline Is a Proposed Oil

Keystone XL Pipeline is a proposed oil pipeline that would transport crude oil from the Canadian oil sands to refineries in the Gulf of Mexico. According to project backer TransCanada, the pipeline is a 36-inch diameter pipe that will carry crude on a 2673-kilometer (1661 mi) journey from the eastern Alberta town of Hardisty to the Gulf Coast. Hardisty is a pipeline nexus, so the oil would come down from the oil sands to the town before entering the Keystone pipeline. The oil would then travel on a route through Saskatchewan, South Dakota, Nebraska into an existing pipeline (Keystone Phase II) through Kansas and Oklahoma to its final delivery point at Nederland, Texas and refineries at Port Arthur on the Gulf Coast (TransCanada, 2011). The pipeline would have the capacity to bring 700,000 barrels per day from Alberta to Texas (Avok, 2011). The amounts to approximately 6-7% of total U.S. daily oil imports (TransCanada, 2011).

The pipeline has been subject to considerable controversy, mainly in the United States. The project, by virtue of crossing the border, required approval from the State Department, giving the President the ability to cancel the project. It was announced in November 2011 that any decision on the project would be delayed until at least 2013 (Goodell, 2011). In response to the delay, Canadian Prime Minister Stephen Harper told President Obama that Canada would turn to Asian markets instead of waiting for the U.S. (CBC, 2011).

The most virulent source of objections to the project comes from environmental groups. At the heart of the opposition is the high cost of crude from Canada. Crude from oil sands is subject to a costly extraction process that is energy-intensive. The carbon footprint from oil sands crude is therefore higher than the carbon footprint from other forms of crude, although some have argued that shipping foreign crude from the other side of the world is just as dirty (Hahn & Passell, 2011). The environmental activists opposed to this form of extraction as being dirty have surprisingly little to say about the massive, unsustainable and sometimes downright stupid oil consumption patterns that make oil sands extraction viable in the first place. It is easier to vilify large oil companies that individual consumers. Oil sands pollution is the messenger, not the message, but the environmental groups attacking Keystone want to shoot the messenger rather than address the problem at the root cause level.

To this end, they have put their pressure on the American government, having failed to convince the Canadian or Albertan governments to give up such a lucrative revenue stream. The environmental opposition has teamed with groups in the United States to apply pressure to stop or delay the project. Nebraska's governor signed a bill to divert the project away from the environmentally sensitive Sandhills and Ogallala aquifer areas, for example (Avok, 2011). There is considerable local opposition to energy projects both clean and dirty, meaning that some of the local U.S. opposition is unrelated to the source of the oil and is largely of the NIMBY variety (Levi, 2011; Hahn & Passell, 2011).

There are significant disagreements about how many jobs the project will create. TransCanada (2011) argues that the project will create 13,000 American jobs in construction, 7000 manufacturing jobs related to the pipeline construction, and 118,000 spinoff jobs along the pipeline route. Critics argue that these job creation figures are vastly inflated, and that permanent jobs will only number in the hundreds once the construction is completed, and some have argued that even the construction jobs will only number 5000 in number (Blodget, 2011).

TransCanada believes that the project will ultimately receive approval. Clearly, this will not happen until after the 2012 election has been completed. However, the statements by PM Harper indicate that Canada may look elsewhere for markets in the event of the pipeline being stalled in the U.S. This of course would not only negate any environmental good done from stopping the project, and would result in even more damage being done as Canadian oil is shipped to Asia and Middle Eastern oil is shipped to the United States. It is likely that, given the desperate state of American oil addiction, the project will be approved no matter who takes the White House, but is will almost certainly be approved if the Republicans capture the Presidency. No matter what direction the election goes, oil consumption patterns in the United States are unlikely to change in the near future. The country is going to need oil from somewhere. Given the national security implications of getting oil from unfriendly countries like Saudi Arabia or Venezuela, it makes sense that the U.S. would pursue Canadian oil.